When Wall Street turns bearish on a stock, it’s worth paying attention. These calls stand out because analysts rarely issue grim ratings on companies for fear their firms will lose out in other business lines such as M&A advisory.
Whatever the consensus opinion may be, our team at StockStory cuts through the noise by conducting independent analysis to determine a company’s long-term prospects. That said, here is one stock poised to prove Wall Street wrong and two facing legitimate challenges.
Two Stocks to Sell:
Hub Group (HUBG)
Consensus Price Target: $39.94 (6.5% implied return)
Started with $10,000, Hub Group (NASDAQ: HUBG) is a provider of intermodal, truck brokerage, and logistics services, facilitating transportation solutions for businesses worldwide.
Why Is HUBG Risky?
- Flat unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy
- Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 37.1% annually, worse than its revenue
- Eroding returns on capital suggest its historical profit centers are aging
Hub Group is trading at $37.50 per share, or 17.6x forward P/E. If you’re considering HUBG for your portfolio, see our FREE research report to learn more.
PNC Financial Services Group (PNC)
Consensus Price Target: $214.95 (3.7% implied return)
Tracing its roots back to 1852 when Pittsburgh's industrial boom demanded stronger financial institutions, PNC (NYSE: PNC) is a diversified financial institution that provides retail banking, corporate banking, and asset management services through a coast-to-coast branch network.
Why Does PNC Worry Us?
- Large revenue base makes it harder to expand quickly, and its annual net interest income growth of 6.9% over the last five years was below our standards for the banking sector
- Weak unit economics are reflected in its net interest margin of 2.7%, one of the worst among bank companies
- Projected tangible book value per share decline of 5.3% for the next 12 months points to tough credit quality challenges ahead
PNC Financial Services Group’s stock price of $207.36 implies a valuation ratio of 1.5x forward P/B. To fully understand why you should be careful with PNC, check out our full research report (it’s free).
One Stock to Watch:
Yelp (YELP)
Consensus Price Target: $34.44 (8.7% implied return)
Founded by PayPal alumni Jeremy Stoppelman and Russel Simmons, Yelp (NYSE: YELP) is an online platform that helps people discover local businesses through crowd-sourced reviews.
Why Do We Like YELP?
- Superior platform functionality and low servicing costs lead to a best-in-class gross margin of 91.1%
- Highly efficient business model is illustrated by its impressive 26% EBITDA margin, and it turbocharged its profits by achieving some fixed cost leverage
- Share repurchases over the last three years enabled its annual earnings per share growth of 28.4% to outpace its revenue gains
At $31.70 per share, Yelp trades at 5.8x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
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